UNITED NATIONS (CNN) -- The man in charge of the-oil-for food program for the United Nations made illicit oil deals with Iraq and "violated standards of integrity," according to an initial investigative report released Thursday.

According to investigating commission chairman Paul Volcker, the probe showed that between 1998 and 2001, Benon Sevan "repeatedly solicited," on behalf of a company called African Middle East Petroleum, several million barrels of oil worth about $1 million.

Sevan denied the allegations late Thursday afternoon.

A "definitive report" is due by mid-summer, and that report also will look at the role of U.N. Secretary-General Kofi Annan and his son, Kojo. The son worked in the 1990s for Cotecna, a Swiss firm that won a contract to authenticate U.N.-approved shipments entering Iraq.

Kojo Annan has told CNN he never worked "directly or indirectly" in any U.N. business.

Under the oil-for-food program, Iraq was allowed to export a limited supply of its crude oil and earmark the revenues for purchases of food, medicine and supplies. The program was in effect from 1996 until the U.S.-led invasion that toppled Iraqi leader Saddam Hussein in 2003.

U.S. investigators have said Iraq's government took in about $21 billion by circumventing the sanctions imposed on Iraq after its invasion of Kuwait in 1991. U.S. congressional committees also are investigating the issue.

Talking to reporters Thursday, Volcker said, "The most disturbing finding is the accumulation of evidence that the director of the office of the Iraq program -- Mr. Benon Sevan -- in fact did repeatedly solicit oil allocations for a small trading company."

"The Iraqi government, in providing such allocations, certainly thought they were buying influence," he added.

"Mr. Sevan placed himself in a grave and continuing conflict-of-interest situation that violated explicit U.N. rules and violated the standards of integrity essential to a high-level international civil servant," Volcker said.

However, in an interview with CNN, Volcker stopped short of saying that Sevan had profited monetarily from the oil deals.

"We don't know whether he got any money out of it. The investigation is continuing. But he certainly put himself in a position where he was conflicted," Volcker said.

In 1998, the report says, Sevan received an allocation of 1.8 million barrels of oil. That year, the company did not take possession of the oil but sold it to two other companies for a nearly $300,000 profit. In 1999, Sevan, on behalf of AMEP and Fakhry Abdel Nour -- who represented the company -- contracted for 2 million barrels, which they sold for nearly a $500,000 profit.

According to the report, "Over the next two years [2000 and 2001] AMEP continued to receive more oil allocations."

Iraq oil ministry records indicate the sales were under Sevan's name, without indicating the company's involvement.

In one instance in October 2001, AMEP paid an illegal surcharge of $160,000 to an Iraqi-controlled bank account in Jordan.

The report notes that according to U.N. financial disclosure forms, Sevan received $160,000 in four cash payments from 1999 to 2003. He listed them on his financial disclosure forms as cash from an aunt who lived in Cyprus and who was a retired government photographer.

"According to a longtime family friend, she never had shown signs of having access to large amounts of cash," the report says.

According to the report, Iraq provided the oil to Sevan in an effort to gain his support on several issues, including paying to repair and rebuild Iraqi infrastructure.

"It's clear ... that a major source of illicit funds to Iraq and the Iraq regime resulted from sanction violations that were outside the framework of the oil-for-food program -- so-called smuggling to Jordan, to Turkey, eventually to Syria then to Egypt," Volcker said.

Sevan's counsel, Eric Lewis, issued a written statement saying, "It is unfortunate that the independent investigative committee has succumbed to massive political pressure and now seeks to scapegoat undersecretary-general and former executive director of the Iraq program, Benon Sevan, for problems with the oil-for-food program.

"Mr. Sevan ran the largest humanitarian program in U.N. history, a program that literally saved tens of thousands of innocent people from death by disease and starvation," Lewis said.

Sevan, a 40-year U.N. employee, was appointed in 1997 as executive director of the oil-for-food program. Before that he was assistant secretary-general for conference and support services. He was U.N. security coordinator until 2002, and had postings in Afghanistan and Pakistan early in his U.N. career.

Volcker stressed that his team had not found systematic misuse of funds by those who administered the program. He said there was careful budgeting, and "the accounting trail is adequate."

In his written response to the report, Kofi Annan said, "Mr. Volcker has said that 'the findings do not make for pleasant reading,' and I agree."

Annan, who said he forwarded the report to the Security Council, pointed out that last year he ordered the "independent inquiry into the administration and management of the oil-for-food program, including allegations of fraud and corruption."

"I made clear from the outset that no one found to have broken any laws would be shielded from prosecution. I stand by that pledge."

Annan added that he was pleased the committee found no wrongdoing in the United Nations' budgeting, accounting and administration for the program.

Among those interviewed in the probe was Boutros Boutros-Ghali, Annan's predecessor from 1992 to 1996.

In other reaction to the report, Adam Ereli, deputy State Department spokesman, said, "We welcome the report. We will be looking at it. We take the allegations seriously and we want to get to the bottom of what happened. We think it's important that transparency and accountability be preserved."